New DoD guidance infused with Better Buying Power principles

Frank Kendall, the undersecretary of defense for acquisition, technology and logistics, DoD

The Department of Defense has new guidance out that will unravel its byzantine acquisition system by
incorporating the latest Better Buying Power principles. Undersecretary for
Acquisition, Technology and Logistics Frank Kendall says building those
principles into policy was the reason he updated Instruction 5000.02.

"I've seen about a dozen different versions of 5000.02 in my career and they
essentially all do the same thing in slightly different ways," Frank Kendall told
Federal News Radio's Francis Rose.

The new version of 5000.02 clears up how to structure an acquisition program's
lifecycle, depending on what is being acquired and the factors that
influence how that acquisition takes place.

The update provides a number of different models that are product related, whether
the product is software or hardware intensive. It also provides a model for rapid
acquisition in which the urgency of the need is the driving factor in how the
program is structured.

"The idea is to make it clear to people that they should start with careful
thought about the job that has to be done and then lay out the program consistent
with that job and the nature of the product, which is a bit of a deviation from
past versions that had one model that people tried to force their programs into
basically," Kendall said.

These changes give DoD a number of options for improved implementation of the
Better Buying Power Initiative. One aspect focuses on affordability analysis.

"Essentially, this is long-term capital planning, where people have to assess
whether future budgets will support a product or not and what level of funding or
cost they are going to be able to bear as they get into production and
sustainment," Kendall said. "So, we're implementing that Better Buying Power
guidance very directly in 5000.02."

The revamped 5000.02 also focuses on the concept of "should cost," in which
program managers look carefully at their cost structures, so that they can
understand where there are opportunities to reduce costs.

Another goal of the updated document is to strengthen the relationship between
requirements and acquisition.

"We've added a decision point into the process from previous versions where the
requirements are defined and then are used to guide the rest of the involvement,"
Kendall said. "That was missing from the previous iteration. We also emphasized
the use of configuration steering boards, which are really boards of both
acquirers and requirers that have to meet together to look at priorities and do
cost tradeoffs and make smart decisions about what features to have in a product.
So, there are a number of ways in which Better Buying Power can be infused into
this version of 5000.02."

Cutting costs is a fundamental responsibility

Much of what Better Buying Power is trying to accomplish is making managers more
cost-conscious, so that they understand cutting costs is a fundamental
responsibility.

"I go back a long ways in the Defense Department, and I think there's always been
this sense that you were going to be punished if you didn't spend all your money,"
Kendall said. "We want people to feel that if they don't spend all their money, if
they divert it to higher priorities for the department or for the service or even
if they return funds to the Treasury, that's a positive thing. We have not done
that, I think, historically."

Kendall acknowledged that the entire chain of command needs to support this
approach in order for it to succeed. To that end, DoD is looking for ways to
recognize cost-saving efforts by project managers.

"The rewards that we give out now are really recognizing cost control,
predominately" he said. "So, recognition, professional advancement, things like
that are things that we can do. We have limited capability to give people
financial incentives in government."

As Kendall was putting together this version of 5000.02, he realized that a large
and complicated body of law had built up governing all of DoD's programs. Although
a lot of good laws were passed since Goldwater-Nichols was enacted, such as
the
Weapons System
Acquisition Reform Act of 2009, a more coherent body of
law needs to be put in place that simplifies the lives of program managers so they
can focus on what they really need to be doing.

Kendall assigned his former chief of staff, Andrew Hunter, to put together a list
of legislative suggestions on how to simplify the body of law covering the DoD
program requirements. A former Hill staffer, Hunter has been on both sides of the
issue.

"Andrew's got the task to put together a team which will be across the department,
basically, and come back with a legislative proposal that we could submit for next
fall," Kendall said. "We'll be working closely on the Congress with this. There
are some efforts that we'd like to be closely aligned with on the Hill to do some
acquisition reform in the next cycle and hopefully we can do this together. I
think there's a huge potential there to make some progress and do something that
will benefit everyone."